Market Research Manager Analysis

Published: 2021/11/25
Number of words: 1261

Step 1: Research

When it comes to established big discount stores, Walmart still maintains market leadership with its sheer size. Target, on the other hand, has been craving out for market share with its appealing advertising campaigns and well-designed partnerships. The distinction between these two retail stores is enormous, and their markets and aggressive competition tells it all. There are two articles utilized in this analysis: “Why Are Wal-Mart and Target Next-Door Neighbors?” by Jenny Schuetz (2015) and “Is Shopping at Walmart an Inferior Good? Evidence from 1997-2010” by Allgrunn and Weinandt (2016). Section 3 in Schuetz’s article will help this analysis as it discusses why Walmart and Target open their stores in proximity to other existing stores. Allgrunn’s and Weinandt’s article focuses on factors such as pricing, which drive Walmart’s success during economic recessions. The “Results” section will be helpful as it discusses the company pricing strategies during recessions.

Step 2: Strengths

One of Target’s strength has been its ability to offer its customers an improved shopping experience. Target offers a better customer experience than Walmart. Over the years, Target has invested over 7 billion dollars in updating its stores to improve customers’ shopping experience (Alshakhoori et al., 2016). For instance, Target stores are well customized based on the communities they are found. This aspect has allowed the company to integrate with its communities all over the United States. Also, the Target floor plans are well designed with bright lights, branded signage, and wide aisles (Alshakhoori et al., 2016).

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Another Target strength can be seen in how the company manages its inventory. Target inventory management strategies are well designed to meet customer demand. Likewise, the company has managed to utilize different forms of replenishment and inventory management designs, including planning, vendor management, and seasonality, all of which help the retailer minimize spillage, inventory markdowns, and lost sales. Walmart lacks a well-established inventory management system; its current system is filled with challenges that lead to massive losses.

Step 3: Weaknesses

Despite having a well-designed inventory management system and a better customer experience, challenges remain, and some of these challenges can damage the company’s reputation. One of Target’s greatest challenges and weaknesses is its data protection system. The company faced one of the worst data breach incidents in 2014. Over 70 million customers lost their credit card details. This incident affected the company’s reputation and triggered lawsuits that cost the company greatly. Walmart has also experienced its fair share of data related incidents. Many Walmart customers complain that the company violates their privacy (Allgrunn & Weinandt, 2016). Many claims that the company exposes them to risks of fraud and identity theft. Another weakness that threatens Target’s business is its pricing strategies. According to Allgrunn and Weinandt (2016), Target charges 15 percent more on its groceries compared to Walmart.

Step 4: Opportunities

Target is growing, and in recent years the company has formulated business deals that have facilitated its growth. Likewise, there are many opportunities that the company can capitalize on to speed this growth. One particular opportunity is its partnership with CVS. In late 2015, CVS Health bought Target’s pharmacy and clinic business for about 1.9 billion dollars (Alshakhoori et al., 2016). This can help Target as it means that the business’ pharmacy section is now managed and operated by CVS. Target customers can now shop and, at the same time, access industry-leading health care services in the stores.

Another opportunity can be seen in the small format stores Target has been opening in dense urban areas. One advantage of these stores is that they are roughly one-third of the typical Target store, which means they can effectively be managed. Walmart’s opportunities are limited to global expansion and business improvement. The company can opt to expand to developing countries or improve its human resource practices.

Step 5: Threats

Target is growing, and it is solidifying its presence in the United States. Nevertheless, there many threats that might diminish the company’s competitiveness. One threat, in particular, is local competition. The company conducts its business in a highly contested and low margin industry. More importantly, Walmart has many stores close to the population, which affects Target market share (Schuetz, 2015). The changing customer preferences are another threat. Customer preferences are changing, and the current COVID-19 pandemic has shown that people can quickly adapt to new situations. Significantly the growing trend in online shopping is affecting Target’s operation in the country while Walmart is quickly adapting to these changes.

Step 5: Who Will Come Out Ahead

By now, Target should have acquired a larger market share than Walmart, but this is not the case. Nevertheless, recent innovation and creativity within the company have shown that things might change for the better. Target is constantly improving its customer experiences. Similarly, the company is always looking for ways it can advance and improve its business. Deals with CVS Health and opening small-format stores have helped the business cement its presence in the United States. Walmart is currently limited to overseas expansion and its losing focus on its United States business. This has allowed Target to advance rapidly, and probably Target will soon overcome competition and establish itself as a retail leader.

Step 7: SWOT Analysis Coca-Cola

Coca-Cola is one of the largest soft drink retailers in the world. It has a large customer base and sells its products to more than 150 countries (Ling, 2017). The company has a strong brand image, and this is one of its strengths. Its brands are present in almost all parts of the world and enjoy a very high degree of popularity. PepsiCo also has an established image but lacks popularity and customer loyalty, which Coca-Cola enjoys. Also, Coca-Cola is a huge company, but PepsiCo has been raising the standards of competition. Competition is one of Coca-Cola’s weaknesses, and PepsiCo’s growth threatens the infinity of the company.

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Despite all these, Coca-Cola can utilize the new opportunities present in growing markets. The company can profit through brand expansion in these markets (Ling, 2017). More importantly, its diversification into healthy products can advance its growth in countries like Germany and the United Kingdom. PepsiCo is currently directing its focus on establishing a global presence and avoiding such opportunities. Threats, including the increasing cost of labor and decreasing raw materials. Global fresh drinking water is decreasing, and this is putting much pressure on the cost of production. This is a threat that is facing both PepsiCo and Coca-Cola.

Coca-Cola has been growing ever since it was founded. The company has experienced different challenges, but with every problem, the company has turned out stronger. This is still expected to happen despite the growing competition. PepsiCo will expand and establish its presence in the global market, but customers will always be loyal to Coca-Cola.

References

Allgrunn, M., & Weinandt, M. (2016). Is shopping at Walmart an inferior good? Evidence from 1997-2010. Journal of Applied Business and Economics. http://www.na-businesspress.com/JABE/WeinandtM_Web18_1_.pdf

Alshakhoori, N., Alkenaizi, A., & George, S. (2016). Business strategies of discount retailers: a comparative study of Target corporation and Costco wholesale corporation. International Journal of Research in Management, Economics and Commerce. http://indusedu.org/pdfs/IJRMEC/IJRMEC_839_54531.pdf

Ling, X. (2017). Customer relationship management: case study Coca-Cola company. https://www.theseus.fi/bitstream/handle/10024/126089/Ling_Xiaojing.pdf.pdf?sequence=1&isAllowed=y

Schuetz, J. (2015). Why are Walmart and Target next-door neighbors? Regional Science and Urban Economics54, 38-48. https://www.federalreserve.gov/econresdata/feds/2014/files/201481pap.pdf

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